Brazil Beckons Businesses Abroad Foreign Companies Find New Opportunities as Collor Government Dismantles Trade Barriers. IMPORTS WELCOME

By Julia Michaels, Monitor | The Christian Science Monitor, July 27, 1990 | Go to article overview

Brazil Beckons Businesses Abroad Foreign Companies Find New Opportunities as Collor Government Dismantles Trade Barriers. IMPORTS WELCOME


Julia Michaels, Monitor, The Christian Science Monitor


AS Brazil's new president, Fernando Collor de Mello, opens up South America's largest market to trade, United States and other foreign businesses are discovering a growing number of opportunities.

As part of Mr. Collor's plan to revitalize Brazil's hyperinflated economy, a 15-year-old prohibition on the import of thousands of products - cars, toys, appliances - was lifted in May. These and other products bear high tariffs that are to be lowered under a four-year program announced in June. Tariffs on some products, like textiles and related machinery, have already been reduced. A law banning many computer products is under review.

"In the whole world, we market other products besides our cameras and film," says Polaroid do Brasil president George Niemeyer. "But we haven't done so here because of import quotas. As the government eliminates these restrictions, we intend to market the whole Polaroid line."

With additional sales of sunglasses, videotapes, and computer diskettes, Mr. Niemeyer expects 1990 revenues to jump to $15 million, from last year's $10 million. Eventually, the Brazilian market could equal that of Spain, he says, where Polaroid sells $40 million a year.

Brazil has long been touted as "the country of the future." But burdened for the last decade by inflation and the third world's largest foreign debt, most of the potential consumer market in the country of 145 million remains hidden. On top of that, Collor's efforts to bring down inflation, which include tight fiscal and monetary policies, have greatly slowed spending and pushed the economy into a recession. Vested interests

Some analysts, skeptical about the new trade policy, say vested business interests may keep out newcomers, especially in highly government-controlled sectors such as computer equipment.

But officials promise that their policies to free up trade and the economy in general will at last bring Brazilian buyers and foreign sellers face to face.

"The environment hasn't been very propitious for investment," says Luiz Paulo Velloso Lucas, director of the industry and trade department of the economy ministry. But now, "the economic environment is turning around and we are fixing clear rules for the development of trade and investment and the insertion of Brazil into the international economy."

Mr. Velloso expects imports to grow by 15 percent this year from $18 billion in 1989. The US and the European Community are the two biggest sources of Brazil's imports.

A lunch time look at Rua Oscar Freire, Brazil's most chic thoroughfare, gives some idea of the gap that officials hope imports will help to fill.

The street is choked with cars manufactured on local assembly lines by Volkswagen, Ford, General Motors, and Fiat. Top boutique windows boast stylish winter clothing, made in Brazil. Inside fashionable restaurants, rock music pours out from locally made sound systems. Patrons' steaming lunches have been prepared with the aid of microwave ovens and food processers, also produced in Brazil. The maitre d' takes a telephone reservation. A computer tallies up each table's bill.

The scene appears not much different from one in Los Angeles or New York, except for the fact that it's summer in the northern hemisphere. …

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